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December 14th, 2018 Newsletter

Futures Trading Interactive Tutorial provided by the CME Group along with Natural gas Outlook, chart and more by Mark O'Brien

December 14th, 2018 - Issue #947

In This Issue

1. Trading 101: Free, Interactive Futures Trading Tutorial
2. Hot Market Report: Natural Gas what a Ride!!
3. Economic Calendar

Our friends over at Futures.io are fundraising for families living in Ecuador in need of basic necessities for the holidays!

1. Trading 101: Free, Interactive Futures Trading Tutorial

An interactive tutorial on the basics ( and a little more) of futures trading.

Regardless if you traded before or new to the futures markets, this tutorial is nicely put together by our regulators and the CME and touches on a variety of sub topics that go into trading futures and options.
Browse through the tutorial at your leisure and at your own pace. Please call us if you have any questions about implementing your strategy or requesting a live demo or have feedback

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2. Hot Market Report: Natural Gas what a Ride!!

By Mark O'Brien, Senior Broker

Click on image below to enlarge

Natural gas futures;

When we talk about price moves among the many commodity futures available for trading, we often focus on outsize price moves because they illustrate extremes in opportunity and risk you can find in trading commodity futures. Over the course of this entire year, large downward moves in stock indexes (Feb. and all of Q4), crude oil (25% drop in Oct.-Nov) have taken center stage. Lesser-known moves have been the near-40% slide in sugar (Mar.-Aug.) and coffee’s continued plunge – a close to 50% price drop – going back to early 2017. But none of these compares to this year’s league-leading ±40% breakout in natural gas in the span of a dozen trading sessions (Oct. 30 – Nov. 14). In terms of dollar-value moves, the Jan. futures contract gained over $17,000 per contract. To put this in perspective, the same dollar value move in the E-mini ($5) Dow futures contract would be a 3,400-point move. Adding to its stand-out performance, as of this newsletter’s release, and since its Nov. 14 high, the Jan. nat. gas contract has sold off more than $11,000 per contract – again, that’s a 2,200-point move in the E-mini ($5) Dow.

Per the Energy Information Agency (EIA), prices rose substantially in the first half of November because of high natural gas demand for heating and power generation. Cold weather across the Lower 48 states in mid-November increased natural gas demand in the residential and commercial sectors. Heating degree days (HDD) reached 14% above normal, the coldest November in the United States in four years. The higher demand contributed to several early-season withdrawals, which kept storage levels low heading into winter and put upward pressure on prices.

And the sell-off? Credit forecasts for milder weather heading into the holidays and the coming-back-to-earth estimates for increased short-term and 2019 gas production. Last week’s gas rig count last reached 198 (the highest since early-June) and current U.S. gas production stands at around 87 billion cubic feet per day (Bcf/d), well above the 78 Bcf/d that we saw this time last year.

Daily chart from this morning, (Dec. 14th 2018).Notice we broke the 50% retracement levelfrom the recent move up. Next supprt is at 365.9, current resistance for this market is 416.1
This chart was prepared using CQG Q Trader software, which you can demo for 14 days with real time data.
To access a free trial to the ALGOS shown in the chart ( DIAMONDS included) along with other tools, visit and sign up for a free trial for 21 days with real time data.


Natural Gas Futures Specs. (this market also offers a mini Nat Gas futures contract which is half the size)
Hours: 5:00 PM to 4:00 PM the following day, Central Time
Margins: $6270 initial, $5700 maintenance ( as of the date of this newsletter)
Point Value: full point = $100 ( Example: 404.0 to 405.0 ). Min. price fluctuation is 0.1 = $10 ( Example: 404.1 to 404.2)

Settlement: Physical, deliverable commodity

Months: Monthly cycle, All Months

Weekly Options:YES
Some of the basic fundamentals to keep in mind when you are considering trading the Nat Gas market:
1. Longer term view of current market prices
2. Supply and Demand
3. Seasonality, i.e. heating and cooling cycles
4. Be aware of Thursday morning’s EIA gas storage report at 9:30 AM CDT

Our brokers here at Cannon will be happy to chat about the Natural Gas market, other energies, other futures, options, futures spreads and much more! Feel free to contact us at any time.

3. Economic Calendar

Source: Moore Research Center, Inc.

Date Reports Expiration & Notice Dates
12/14
Fri
7:30 AM CST - Retail Sales(Nov)
7:30 AM CST - Retail Sales Ex-Auto(Nov)
8:15 AM CST - Capacity Util & Industrial Prod(Nov)
9:00 AM CST - Business Inventories(Oct)
LT: Dec Wheat(CBT)
Dec Corn(CBT)
Dec Oats(CBT)
Dec Soymeal,Soyoil(CBT)
Dec Lean Hogs(CME)
Dec Lean Hogs Options(CME)
Jan Coffee Options(ICE)
Jan Crude Lt Options(NYM)
12/17
Mon
7:30 AM CST - Empire Manufacturing(Dec)
9:00 AM CST - NAHB Housing Market Index(Dec)
11:00 AM CST - NOPA Crush
3:00 PM CST - Net Long-Term TIC Flows(Sep)
LT: Dec Currencies(CME)
Dec Eurodollar(CME)
Dec Mx Peso(CME)
Dec US Dollar(ICE)
Dec Eurodollar Options(CME)
Jan Sugar-11 Options(ICE)
12/18
Tue
7:30 AM CST - Building Permits & Housing Starts(Nov)
3:30 PM CST - API Energy Stocks
 
 
LT: Dec Canadian Dollar(CME)
Dec Coffee(ICE)

 
12/19
Wed
6:00 AM CST - MBA Mortgage Purchase Index
7:30 AM CST - Current Account Balance(Q3)
9:00 AM CST - Existing Home Sales(Nov)
9:30 AM CST - EIA Petroleum Status Report
1:00 PM CST - FOMC Rate Decision(Dec)
2:00 PM CST - Milk Production
2:00 PM CST - National Hop Report
2:00 PM CST - Dairy Product Sales
LT: Dec 10 Year Notes(CBT)
Dec Bonds(CBT)
Jan Crude Lt(NYM)
Jan Platinum Options(NYM)
Jan Palladium Options(NYM)
12/20
Thu
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly
7:30 AM CST - Philadelphia Fed(Dec)
9:00 AM CST - Leading Indicators(Nov)
9:30 AM CST - EIA Gas Storage
3:30 PM CST - Money Supply
LT: Dec S&P 500(CME)
Dec S&P 500 Options(CME)

 
12/21
Fri
7:30 AM CST - Durable Goods-Ex Transportation(Nov)
7:30 AM CST - Durable Orders(Nov)
7:30 AM CST - GDP-Third Estimate(Q3)
7:30 AM CST - GDP Deflator-Third Estimate(Q3)
7:30 AM CST - PCE Prices & Core(Nov)
7:30 AM CST - Personal Income & Spending(Nov)
11:00 AM CST - Cold Storage
11:00 AM CST - Cattle On Feed
11:00 AM CST - Hogs & Pigs
FN: Jan Crude Lt(NYM)
LT: Dec E-Mini Dow(CME)
Dec E-Mini S&P 500(CME)
Dec E-Mini NASDAQ(CME)
Dec Russell(CME)
Dec E-Mini Dow Options(CME)
Dec E-Mini S&P 500 Options(CME)
Dec E-Mini NASDAQ Options(CME)
Dec Russell Options(CME)
Jan 2,5,10 Year Notes Options(CBT)
Jan Bonds Options(CBT)
Jan Canola Options(CBT)
Jan Wheat Options(CBT)
Jan Oats Options(CBT)
Jan Rough Rice Options(CBT)
Jan Soybeans,Soymeal,Soyoil Options(CBT)
Jan Cotton Options(NYM)
Jan Orange Juice Options(ICE)

12/24
Mon
CHRISTMAS EVE
 
 
 

 
 
 
12/25
Tue
CHRISTMAS
 
 
 

 
 
 
12/26
Wed
8:00 AM CST - S&P Case Shiller HPI(Oct)
3:30 PM CST - API Energy Stocks
 
 
LT: Jan Copper Options(CMX)
Jan Gold Options(CMX)
Jan Silver Options(CMX)
Jan Natural Gas Options(NYM)
Jan RBOB & ULSD Options(NYM)
12/27
Thu
7:30 AM CST - Initial Claims-Weekly
8:00 AM CST - FHFA Housing Price Index(Oct)
9:00 AM CST - New Home Sales(Nov)
9:00 AM CST - Consumer Confidence(Dec)
9:30 AM CST - EIA Natural Gas Report
10:00 AM CST - EIA Petroleum Status Report
2:00 PM CST - Dairy Products Sales
3:30 PM CST - Money Supply
LT: Dec Copper(CMX)
Dec Gold(CMX)
Dec Silver(CMX)
Dec Platinum(NYM)
Dec Palladium(NYM)
Jan Natural Gas(NYM)
FN=First Notice, OE=Option Expiration, LT=Last Trade

Disclaimer: This calendar is compiled from sources believed to be reliable. Moore Research Center, Inc. assumes no responsibility for any errors or omissions. It is meant as an alert to events that may affect trading strategies and is not necessarily complete. The release dates for certain economic reports may have been rescheduled.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!

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